By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology firms that are beginning to make online businesses more feasible.

For several years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have cultivated a culture of cashless payments.

Fear of electronic fraud and slow web speeds have actually held Nigerian online customers back but wagering firms says the new, fast digital payment systems underpinning their sites are changing attitudes towards online transactions.
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"We have actually seen substantial development in the number of payment services that are available. All that is absolutely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

"The operators will go with whoever is faster, whoever can link to their platform with less problems and problems," he said, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development has actually been matched by an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and certified banks.

In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions jumped to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, rising mobile phone use and falling data costs, Nigeria has long been viewed as an excellent chance for online services - once consumers feel comfy with electronic payments.

Online gaming firms state that is occurring, though reaching the tens of countless Nigerians without access to banking services stays a challenge for pure online retailers.
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British online wagering company Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

"There is a progressive shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The growth in the number of fintechs, and the federal government as an enabler, has helped business to thrive. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria's participation in the World Cup state they are discovering the payment systems created by regional startups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by services operating in Nigeria.

"We added Paystack as one of our payment choices without any excitement, without announcing to our customers, and within a month it shot up to the number one most used payment choice on the website," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's 2nd greatest sports betting firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option because it was added in late 2017.

Paystack was established by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from financiers consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, stated the number of regular monthly transactions it processed rose from about 8,000 in early 2016 to more than 900,000 since June 2018.

"In early 2016 we were processing about $3,000 a month. Today we process well over $11 million every single month," stated Emmanuel Quartey, Paystack's head of development.

He stated an ecosystem of developers had emerged around Paystack, producing software application to integrate the platform into websites. "We have actually seen a growth in that neighborhood and they have actually brought us along," said Quartey.

Paystack stated it enables payments for a variety of wagering firms but likewise a wide range of organizations, from energy services to transport companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.
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FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have accompanied the arrival of foreign investors intending to take advantage of sports betting wagering.

Industry specialists state the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more established.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a half stake in Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split in between shops and online however the ease of electronic payments, expense of running stores and capability for clients to prevent the stigma of gambling in public meant online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a store network, not least since lots of consumers still remain hesitant to spend online.
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He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops often function as social hubs where customers can watch soccer free of charge while putting bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's final heat up game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He stated he started sports betting 3 months ago and bets approximately 1,000 naira a day.

"Since I have actually been playing I have actually not won anything however I believe that a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos